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1- IAS 37: Future operating losses (unless arising from onerous contract) should not be included in a restructuring provision. Do this onerous contract have to be directly related (caused by) with restructuring to be included or just any future operating losses from onerous contracts can be included?
2- IFRS 9 permits simplified treatment with trade receivable, lease receivable and contract asset by recognizing loss allowance @ amount equal to lifetime credit losses. But these assets are not recognized at amortised cost or Fair Value through OCI (are they?) so why recognize loss allowance at all? And is loss allowance same as bad debt allowance (as for trade receivables)? And if yes, is bad debt allowance always treated under IFRS 9?
Finally, I have this last question. Remembering disclosure requirements of so many accounting standards (in SBR syllabus) is hard and gets mixed up in practice. SO should I just list random points regarding the important (as well as technical) parts of the standard as disclosure points in the exam – as this may end up covering the actual disclosure points?
Thank you for your patience, and help.
1 – On onerous contract is effectively a loss making contract and so the losses will be recognised as they are contractually bound.
2 – The standard is specific about the impairment testing of these assets and how they are treated. They are actually held at amortised cost. The loss is effectively a bad debt allowance but the calculation of it is more specific than the ways in which it was previously calculated, so please call it a loss allowance. Bad debt allowances are a thing of the past.
I’d not worry about disclosures unless it is a specific standard related to disclosures, so IAS 24, IFRS 7, IFRS 8, IFRS 12.
Thanks
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